Ethereum price is down about 1.4% over the past 24 hours, extending its broader weakness. At first glance, this looks like a routine pullback inside a consolidation phase. But this decline did not appear randomly. It came right after a warning signal flashed on the daily chart, suggesting the recent recovery may already be losing steam.

What makes this moment unusual is the reaction from traders. Instead of reducing risk, leveraged long positions have surged past $1 billion. This creates a dangerous contradiction. The same conditions that are warning of a deeper drop are also attracting aggressive bullish bets. This disconnect could now decide Ethereum’s next major move.

Bearish Divergence And Supply Cluster Are Now Pointing To The Same Risk

The first warning sign appeared through a hidden bearish divergence on the daily chart. Between January 21 and February 25, the Ethereum price formed a lower high. This means the recent recovery was weaker than the previous rally, confirming the broader downtrend remains intact.

At the same time, the Relative Strength Index (RSI), which measures momentum strength, formed a higher high. This creates a hidden bearish divergence. This pattern usually appears during downtrends and signals that the recovery is only temporary, with the larger decline likely to continue.

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This signal becomes more important because Ethereum is already down about 32% over the past 30 days. That confirms the broader structure remains bearish. Now, on-chain data shows where this pullback could accelerate.

The Ethereum cost basis heatmap reveals a major support cluster between $1,870 and $1,890. Around 1.40 million ETH was accumulated in this range. This level is important because it represents the average buying zone for a large group of holders.

These holders are still in profit at current prices. But if Ethereum falls into this zone while fear increases, many may sell to protect their gains. This could weaken support and allow the pullback to deepen.

This makes the divergence warning more dangerous as a key support lies nearby.

Whale Selling And $1 Billion Long Exposure Create A Dangerous Conflict

At the same time, large holders are starting to show caution.

Ethereum supply held by whales has dropped slightly from 113.41 million ETH on February 25 to 113.39 million ETH now. This is not a large drop, somewhere in the $40 million range, but it confirms that whales are no longer aggressively accumulating.

This matters because whale activity often signals future price direction. When whales stop buying or begin selling, it weakens market confidence. But derivatives traders are reacting in the opposite way.

Binance liquidation data shows cumulative long leverage has crossed $1 billion. Short leverage, in comparison, sits near $382 million. This means long exposure is nearly three times higher. Even more importantly, nearly $697 million of long leverage is concentrated near $1,870. Per the map, the risk starts developing if the ETH price drops under $2,015.

This level aligns almost perfectly with the cost basis cluster starting near $1,870. This creates a high-risk situation.

If Ethereum falls into this zone, holders may begin selling while leveraged long positions are forced to close. These forced liquidations would push the price even lower and accelerate the correction. That risk could be the reason why whales have stepped back, for now.

But despite these risks, traders are still betting on a breakout. The reason becomes clear in Ethereum’s price structure itself.

Ethereum Price Structure Explains Both The $2,600 Hope And The Breakdown Risk

Ethereum’s recent price structure is creating the optimism that derivatives traders are betting on. On the 8-hour chart, Ethereum is forming a cup and handle pattern. This is a bullish structure that often appears before upward breakouts.

The handle is forming now as a consolidation phase, something that the traders might be considering as a lull before the breakout.

The neckline of this pattern is sloping upward. An upward-sloping neckline strengthens breakout expectations, provided the price can break past key resistance levels. The critical ones are now revealed by the technical projections.

If Ethereum breaks above $2,140, the pattern breakout hopes rise. While the neckline will still be at a distance, the hopes of a 17% rally toward $2,600 would surface. This upside potential possibly explains why traders continue opening long positions despite growing warning signs.

But this optimism depends entirely on Ethereum holding its support levels. If Ethereum falls below $1,990, weakness begins increasing, although the pattern still survives.

A drop below $1,890 would become much more serious. This level sits directly at the top of the cost basis cluster between $1,870 and $1,890. Losing this zone would weaken holder confidence and expose Ethereum to a deeper decline.

Below $1,820, the bullish structure would begin failing. If Ethereum falls below $1,790, the cup and handle pattern would be invalidated completely. This would remove the bullish setup and could trigger large-scale long liquidations.

That is why the same price structure attracting $1 billion in bullish bets is also sitting directly above the most dangerous breakdown zone. Recovery is still possible. But Ethereum must break above $2,140 first. Until then, Ethereum remains stuck between breakout hope and breakdown risk.

January’s PPI (Producer Price Index) printed +2.9% year-over-year (YoY) against a +2.6% forecast, with core PPI surging +3.6% versus +3.0% expected, sending US equities lower and reviving stagflation talk across crypto and macro communities.

The Producer Price Index measures wholesale-level inflation. This is what businesses pay before costs pass through to consumers, making it a leading signal for Federal Reserve (Fed) policy decisions.

Why it matters:

• Services prices drove the core beat, with month-over-month core PPI rising +0.8% against a +0.3% forecast, more than double expectations.
• The S&P 500 fell -0.87%, the Dow Jones dropped -1.38%, and the Nasdaq slid -1.09% following the release, reflecting immediate repricing of rate-cut expectations.
• A hotter-than-expected PPI reduces the probability of near-term Fed cuts, lifting yields and pressuring risk assets, including Bitcoin (BTC) and altcoins.
• Rising producer costs alongside slowing GDP growth creates a stagflation scenario where the Fed cannot cut without reigniting inflation or hold without slowing the economy further.

The details:

• Headline PPI came in at +2.9% YoY (prior: +3.0%); core PPI at +3.6% YoY (prior: +3.3%), per data released February 27 at 8:30 AM ET.
• Month-over-month: headline +0.5% (exp. +0.3%), core +0.8% (exp. +0.3%), driven by a services component surge.
• Trade services margins climbed +2.5% as a primary driver of the core beat.
• S&P 500 futures were already down 57 points before the data hit, signaling broader stress beyond the PPI print alone.
• The upside came from trade-services normalization, not from broad input-cost acceleration.

The big picture:

• Analysts like Crypto Rover and Max Crypto flag a stagflation signal: core PPI rising while GDP cools. This combination often limits central bank flexibility.
• The Fed’s rate-cut timeline faces further pressure as back-to-back inflation beats challenge the disinflation trend heading into March.

Terra Luna Classic (LUNC) price lacked clear direction for weeks before staging a sharp three-day rally. The sudden surge pushed the token up nearly 30% at its intraday peak. However, technical and on-chain signals suggest the breakout may struggle to sustain momentum.

The broader crypto market has experienced periodic bursts of volatility. LUNC’s recent move stands out due to its speed rather than structural strength. While price action turned briefly bullish, underlying metrics indicate caution is warranted.

Bitcoin – The Cause Of LUNC’s Rise

The primary catalyst behind LUNC’s rally was a surge in trading volume. Increased speculative activity drove short-term price acceleration. At the same time, LUNC’s correlation with Bitcoin dropped to 0.04, signaling near-complete decoupling.

Such low correlation suggests the token temporarily moved independently of BTC. Decoupling phases can attract traders seeking isolated momentum plays. However, similar patterns have appeared across several altcoins recently. These shifts often reflect short-lived speculative rotations rather than lasting structural change.

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LUNC Is Trapped Under Bearish Pressure

The Chaikin Money Flow indicator reveals a concerning divergence. Despite rising prices over the past three days, CMF did not confirm sustained inflows. Capital entering the market remained subdued relative to price movement.

A bearish divergence formed as price climbed while CMF weakened. This pattern indicates that buying pressure failed to match the rally’s strength. Outflows continued quietly beneath the surface.

Weak inflow confirmation raises questions about durability. Without consistent capital accumulation, rallies risk reversal. Price movements unsupported by strong liquidity often correct once speculative interest fades.

Derivatives data adds to the cautious outlook. LUNC’s funding rate currently sits in negative territory. Negative funding signals dominance of short positions over longs.

Aggregate funding metrics show traders are positioning for downside risk. Elevated short interest can cap upward momentum. If short bias persists, LUNC may continue consolidating unless forced liquidations trigger a squeeze.

LUNC Price May Not See Much Growth

LUNC rose roughly 20% over the past three days and surged 30% at its recent intraday high before retreating to $0.00004136. The long upper wick on the chart signals rapid profit-taking. Quick distribution at higher levels limited further upside continuation.

Current technical conditions present a bearish bias. If selling pressure resumes, LUNC could decline toward $0.00003459. This level aligns with the 23.6% Fibonacci retracement. A breakdown below $0.00003459 may expose the next support near $0.00003236, invalidating the bullish recovery narrative.

On the upside, LUNC remains capped beneath the $0.00004203 resistance, marked by the 61.8% Fibonacci level. A decisive breakout above this barrier would shift short-term momentum. Flipping $0.00004203 into support could push the token toward $0.00004530 and potentially higher, invalidating the immediate bearish thesis.

A Minnesota lawmaker has introduced a bill that could ban virtual currency kiosks statewide after reports of scams tied to crypto ATMs. Bitcoin ATMs (CRYPTO: BTC) have emerged as a focal point in law-enforcement briefings, where operators have been accused of enabling irreversible transactions that are hard to trace. Rep. Erin Koegel unveiled House File 3642 during a Thursday session of the Commerce Finance and Policy Committee, arguing the technology behind crypto kiosks remains novel and minimally regulated. Minnesota voters have already seen a 2024 law intended to curb kiosk abuse by capping new-user deposits at $2,000 and requiring refunds to fraud victims, but Koegel’s measure would push toward a full ban if enacted. Supporters say it would shield residents from irreversible financial crimes, while opponents caution it could restrict access to legitimate crypto services and push activity underground. Koegel cited committee remarks and testimony during the session.

Key takeaways

• House File 3642 would ban crypto kiosks across Minnesota if enacted, expanding beyond the state’s 2024 safeguards.
• The 2024 law introduced a $2,000 deposit limit for new kiosk users and required refunds for fraud, signaling a trend toward consumer protections.
• Law enforcement officials described cryptocurrency kiosks as a common scam vector, with aging populations identified as particularly vulnerable groups.
• There are about 350 licensed crypto kiosks in Minnesota, operated by firms including Bitcoin Depot and Coinflip, according to the state’s findings.
• Industry responses emphasize a broader regulatory debate about crypto ATMs, privacy, and access versus fraud risk, with related moves like ID-verification policies signaling a shifting risk profile.

Tickers mentioned: $BTC

Sentiment: Neutral

Market context: The Minnesota proposal sits within a broader regulatory moment as lawmakers and regulators reassess crypto kiosks amid ongoing fraud concerns. Across the U.S., states are weighing standardized protections for crypto ATM users, while operators consider compliance measures to balance customer access with risk controls. The trend toward enhanced identity checks and clearer fraud warnings reflects a shift in how the market perceives the balance between innovation and consumer protection.

Why it matters

The bill’s momentum highlights a policy question at the intersection of financial technology and consumer protection. Crypto kiosks offer convenient access points for the public to buy and sell digital assets, but their relative lack of traditional safeguards has made them attractive targets for scammers. Minnesota’s current framework—enacted in 2024—was designed to curb abuse by imposing a deposit cap and mandating refunds for fraud victims. Yet the proposed HF 3642 would push the state toward a more restrictive approach, potentially banning the devices altogether. The stakes are not merely about kiosks; they reflect a broader debate about how to regulate rapidly evolving crypto infrastructure without stifling legitimate use cases or hindering access to digital assets for ordinary residents.

Industry responses point to a practical tension: operators argue that well-defined rules can reduce abuse while preserving access. Bitcoin Depot, one of the largest operators in the U.S., has already begun a phased rollout of ID verification for all transactions at its machines, a policy aimed at curbing misuse while maintaining user convenience. The move signals a willingness among some players to embrace stronger controls in the name of compliance and consumer protection; it also foreshadows a regulatory environment in which basic access could be contingent on identity verification and heightened disclosures. The pressurized policy backdrop is further amplified by consumer advocacy groups that emphasize protections, such as fraud warnings and transaction-limits, as essential to preserving trust in mainstream crypto usage.

For the market, these developments touch on liquidity, risk sentiment, and the perceived legitimacy of on-ramp infrastructure. When a state with tens (and potentially hundreds) of kiosks contemplates a ban, it underscores the fragility and scrutiny surrounding crypto-on-ramp channels. While the debates unfold, observers watch for how other states respond to similar concerns and whether broader federal or regulatory moves could harmonize or clash with state-level approaches. The tension between enabling convenient access to digital assets and preventing harms linked to fraudulent activity remains a defining feature of the current regulatory landscape.

In parallel, consumer protection narratives continue to gain traction. The American Association of Retired Persons (AARP) has highlighted ongoing fraud protections in several states, urging operators to implement practical safeguards such as transaction limits and clear fraud warnings. As lawmakers weigh HF 3642 against the potential benefits of accessible crypto tools for everyday users, the interplay between policy, technology, and consumer trust will likely shape the contours of Minnesota’s crypto kiosk ecosystem in the months ahead. The discussion also echoes broader policy conversations about how to regulate novel financial technologies while preserving opportunities for legitimate innovation.

“Because of the nature of cryptocurrency, these fraudulent transactions are often irreversible and incredibly hard to track,” Koegel said, emphasizing the need for a coordinated, cross-partisan response to protect citizens from irreversible financial crimes.

The current environment therefore blends caution with pragmatism: protect vulnerable users and deter fraud, while acknowledging that kiosks can provide a straightforward entry point to digital assets for some residents. The outcome of HF 3642 remains uncertain, but the policy debate is unlikely to fade anytime soon as Minnesota and other states evaluate how to balance accessibility and security in an evolving crypto economy.

What to watch next

• Progress of House File 3642 in the Minnesota House of Representatives, including committee votes and potential floor action.
• Any Senate companion or changes in the legislative process that could influence the bill’s trajectory.
• Updates to kiosk regulations and enforcement actions stemming from the 2024 deposit-limit law, and any new operator compliance measures.
• Industry responses from crypto ATM operators regarding verification policies and fraud-prevention efforts, and how these may influence state debates.

Sources & verification

• House File 3642 and committee materials from the Minnesota House of Representatives (HF 3642 – Commerce Finance and Policy Committee materials).
• Committee hearing coverage and remarks, including Rep. Koegel’s statements and the discussion on the 2024 law, captured in the committee video (YouTube: https://www.youtube.com/watch?v=w6hc8OkvaZE).
• State data on licensed crypto kiosks in Minnesota (approximately 350 kiosks operated by Bitcoin Depot, Coinflip, and others).
• Bitcoin Depot policy update requiring ID verification for all crypto ATM transactions (Cointelegraph: https://cointelegraph.com/news/bitcoin-depot-mandatory-id-verification-crypto-atms).
• AARP’s guidance on crypto ATM fraud protections and related protections in multiple states (https://www.aarp.org/advocacy/crypto-atm-fraud-protections/).

A Minnesota lawmaker has introduced a bill that could ban virtual currency kiosks across the state after reports of incidents involving crypto-related scams.

In a Thursday session of the Minnesota House of Representatives Commerce Finance and Policy Committee, Representative Erin Koegel said the bill, House File 3642, would address the “novel” and “minimally regulated” technology of crypto kiosks.

Koegel said she had heard from state law enforcement agencies that many scammers used the kiosks to trick residents into sending crypto, while legitimate traders tended to use centralized exchanges.

“Because of the nature of cryptocurrency, these fraudulent transactions are often irreversible and incredibly hard to track,” said Koegel, adding: 

“This bill gives us an opportunity to work across party lines to protect the people of Minnesota from irreversible financial crimes.”

Minnesota’s government already passed a law in 2024 attempting to fight scammers using the state’s virtual currency kiosks. The law set a $2,000 deposit limit for new kiosk users and required companies to issue full refunds for fraud victims. However, Koegel’s bill, if passed, could fully ban the technology in Minnesota.

“Within the past couple of years, we’ve definitely identified an issue with these Bitcoin ATMs, specifically in our jurisdiction,” said Sergeant Jake Lanz of the St. Cloud Police Department at the Thursday committee meeting. “[…] it also is notable for us that it is definitely a target of our aging population.”

Related: US senators to weigh CFTC, other amendments to crypto market structure bill

According to the House, Minnesota has about 350 licensed crypto kiosks operated by several companies, including Bitcoin Depot and Coinflip. The American Association of Retired Persons reported in February that 17 states had laws on the books requiring crypto ATM operators to implement protections against fraudsters, such as setting daily transaction limits and requiring fraud warning signs.

Bitcoin ATM operator to require IDs for all transactions

On Tuesday, Bitcoin Depot, one of the largest crypto ATM operators in the US, announced that it would implement a policy requiring ID verification for users with every transaction at one of its machines. The phased rollout, which began in February, was in response to “potential misuse,” though the company did not specifically mention state-level crackdowns on scammers.

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